NEW YORK, April 12, 2011 — Asian Development Bank Chief Economist Dr. Changyong Rhee described Asia's recovery from the economic slowdown as "quite firm," saying "high growth rates" can be for the next couple of years. Rhee warned, however, that those growth rates "will be very hard to continue" in the long term. Rhee made his statements at the Asia Society in New York in a talk moderated by Scott MacDonald, Principal at Aladdin Capital Holdings.
Rhee maintained that modest recovery seen in the major industrialized economies — the US, Japan, and the "eurozone," the 17 European Union member states that have adopted the euro as their common currency— is subject to uncertainty due to a number of downside risks, such as the recent surge in oil and food prices. While developing Asia's recovery is firm by comparison, Rhee warned that inflation, which sometimes accompanies recovery, may compromise Asia's ability to maintain sustainable and inclusive growth.
Rhee also stated that if Asia wants to continue its high growth in the medium- and long-term, it is imperative that the region look for new and supplementary sources of growth. He proposed more "South-South" economic links between developing countries as one alternative, noting that such partnerships still face various structural weaknesses which must be addressed in order to reach full growth potential.
Reported by Diana Choi